News

Governor’s 2017-18 budget brings increases to Proposition 98 and Local Control Funding Formula

Thu, 01/12/2017

The California School Boards Association's Statement on Governor's budget highlights an increase in LCFF spending, but also a possible increase for pension costs.

SACRAMENTO, Calif., (January 10, 2017) – Governor Jerry Brown unveiled a 2017-18 state budget today that includes an increased Proposition 98 guarantee and an investment that helps move the Local Control Funding Formula (LCFF) closer to full implementation. Yet, despite this welcome increase from the depths of the recession, California still ranks in the bottom quintile of school funding nationally, and on almost every other national comparison, as school districts and county offices of education grapple with increasing demands, especially with dramatic increases in pension contributions.

The Proposition 98 guarantee (which requires a minimum percentage of the state budget to be spent on K-14 education) of $73.5 billion is an increase of $2.1 billion from 2016-17, raising total per-pupil spending from Proposition 98 to $10,910, which is $331 more per student under Proposition 98 last fiscal year. A $744 million investment to close the remaining funding gap keeps LCFF at 96 percent of full implementation and supports cost-of-living adjustments.

“The Governor’s investment in LCFF is a positive step for California’s students and demonstrates the state’s commitment to furthering the progress our schools have made with the new funding model,” said CSBA President Susan Henry. “Full implementation of LCFF is an important milestone as we continue our work to prepare all of our students for college and career.”

While the increases to the Proposition 98 guarantee and LCFF are positive for California’s six million students, increases to employer contributions to CalPERS and CalSTRS are poised to have a major impact on education funding in the state, hastened by the recent announcement that CalPERS will lower its discount rate from 7.5 to 7.0 percent. The result of this action is that employer contributions to CalPERS are projected to more than double by 2022.

“California’s school districts are already facing enormous cost pressures from rising CalPERS and CalSTRS contributions, and the effect on our classrooms is already being felt,” Henry said. “Recognizing that these costs will continue increasing at a much higher rate than previously projected, it is incumbent upon the state to protect the Proposition 98 guarantee and to move toward an adequate level of funding for our schools.”

“California still ranks near the bottom nationally in per-pupil spending, and these looming cost increases present further challenges – it is our hope that the Governor and the Legislature recognize that greater levels of support for our children are necessary,” Henry added. “In this budget, Governor Brown has reiterated his commitment to invest in the future of California’s transportation infrastructure. However, California’s students are our state’s human infrastructure, and we must invest in them as well.”